Acas has drawn up the guide to help businesses, staff and trade unions agree how to handle the use of the internet, blogs and social media websites such as Facebook and Twitter inside and outside of work.
Almost six out of ten staff (55%) now using social media work, either on computers or mobile phones. But employers say many staff are also abusing it by looking at their personal web pages instead of working, posting derogatory comments about managers and colleagues, or buying and selling online.
Most employers are unclear how to manage this aspect of the digital revolution. A few, such as BT and Her Majesty's Revenue and Customs, have issued their own policies, but fewer than one in 10 employers have a social media policy.
Acas's guide is believed to be the first offering advice to all employers.
Most employees, too, are confused over when, where and how they can use social media in and away from work.
Acas's main recommendation is that an employer should consult with staff and trade unions to spell out the dos and don'ts of using the internet and social media, and should also make clear the consequences of breaching its policy, which should become part of contracts of employment.
It stresses in working out a policy, employer, staff and unions should agree so employees do not feel gagged, staff and managers feel protected against online bullying, and the firm feels confident its reputation will be guarded.
Acas chief executive John Taylor said: "Online conduct should not differ from offline conduct. Employees should assume that everything they say on the internet could be made public, and should think whether they want their colleagues or boss to read it. They might not mean it, but what they post could end up being seen by billions of people worldwide."
Acas also says it is vital employers, employees and unions keep up to date to review a company's internet and social media policy because the technology and its use are evolving fast. And the issues have yet to be really tested in law.
Taylor added: "If an employer is too tough, it needs to consider the potential impact of any negative publicity. Heavy-handed monitoring can cause bad feeling and be time consuming. A manager wouldn't follow an employee down the pub to check on what he or she said to friends about their day at work. Just because they can do something like this online, doesn't mean they should.
"Importantly, many companies want their employees to be up to date and comfortable with internet working, as social media sites are increasingly a key part of business and marketing. Firms need to bear this in mind."
Commenting, Sam Kinstrey, MD, 2e2 Training, added: " There is a clear need for social media policies and training. Yes, it's true that in some cases workers might be using social media for personal reasons at work. However, social media use by an employee to help them in their professional lives can also bring huge benefits to an organisation.
"We need to remember that working practices have changed. An employee might look at Facebook during the day but at the same time, they might be looking at their work emails in the evening. Increasingly workers are going to expect proactive policies around social media, as they'll expect to be armed with the latest technologies in their jobs. It's vital that policies around social media use are informed by working practices and coupled with training - otherwise employers could end up with a lot of pain and no benefit. Ultimately, social media can bring huge benefits to an organisation like finding colleagues with a specialist skill set who can be used to respond to a customer query quickly, therefore delivering better employee interaction and improved customer service."